{{asɛmtiNe Ɔkyerɛwfo}} | Nhomakorabea | Nneɛma a ɛma wotumi yɛ ade

Akwankyerɛ

Learning Objectives

Students will be able to:

List the different categories of expenses
Explain how four different budgeting strategies work
Weigh the pros and cons of each budgeting strategy

National Standards for Personal Financial Education

Spending

1b: Develop a budget to allocate current income to necessary and desired spending, including estimates for both fixed and variable expenses
1c: Explain methods for adjusting a budget for unexpected expenses or emergencies

1

Pretend you won $1,000 in a contest. Explain how much of this money you would allocate toward spending, saving, and other purposes and what led you to those decisions.

When creating your budget, it’s important to realize that not all expenses are the same. There are actually two distinct types of expenses - fixed and variable. Read this article, stopping at Budgeting for Fixed and Variable Expenses, to learn about these types of expenses. Then, answer the questions.

1

In your own words, explain the difference between a fixed expense and a variable expense.

1

Your cell phone bill
A restaurant
Your Netflix subscription
An emergency room bill
School supplies

Fixed
Variable

There are many popular budgeting strategies. You get to decide which one works best for you! Read the short article about four of the most popular budgeting strategies. Then, answer the questions.

1

Briefly summarize the Pay Yourself First strategy.

1

The 50/30/20 budget recommends you spend 50% of your budget on needs. What factors would impact your ability to stick to this rule?

1

Zero-based budgeting involves making sure every available dollar is accounted for. How is this beneficial for someone using this method?

1

How does envelope budgeting work?

Let’s look specifically at zero-based budgeting. Watch this video to see how this budgeting strategy works and then, answer the questions.

1

Desean sets up his zero based budget and has $175 left after he assigns all of his expenses to each category. What would be a good category for him to put that money in?

1

Think about the process of zero-based budgeting. What might one drawback of this method be?

Now let’s take a look at envelope budgeting. This strategy has had a resurgence in popularity due to social media and is also known as Cash Stuffing.

1

What is one benefit of envelope budgeting?

1

True or False: Envelope budgeting means that you have to deal with only cash and physical envelopes.

Nokorɛ

Ɛnyɛ ampa

1

Do you think this is a method that you would use? How might using this method benefit you?

1

Create a personal budget. This budget can be for college, post-graduation, a hypothetical business, anything. This budget should be done in google sheets and there are several different templates you can use to assist in this.

1

What does it mean to "pay yourself first?"

Set aside some fun money in each month's budget so you can enjoy yourself

Auto-deposit a set amount of money into savings after each paycheck so that you don't spend all your income

Be self-employed, so that you don't have a boss and get to keep all income from your business for yourself

Do all of your budgeting at the beginning of the month, rather than at the end

1

Which of the following is a recurring expense?

Graduation present for your sister

A large car repair bill

A concert ticket

Daily Starbucks latte

1

Djamila is using the envelope budgeting method. She wants to go out with friends to eat and opens her Restaurant envelope to find that it only has $5 left in it. What budgeting advice would you give to her?

Borrow money from another category that will likely have a surplus this month

Use her credit card and put extra money into the credit card envelope next month

Dip into her emergency fund to cover the shortfall

Suggest other options to her friends that don’t involve going out to eat

10.1 Lesson 1: Budgeting Strategies

10.1 Lesson 1: Budgeting Strategies

Learning Objectives

Learning Objectives

Pretend you won $1,000 in a contest. Explain how much of this money you would allocate toward spending, saving, and other purposes and what led you to those decisions.

In your own words, explain the difference between a fixed expense and a variable expense.

Briefly summarize the Pay Yourself First strategy.

The 50/30/20 budget recommends you spend 50% of your budget on needs. What factors would impact your ability to stick to this rule?

Zero-based budgeting involves making sure every available dollar is accounted for. How is this beneficial for someone using this method?

How does envelope budgeting work?

Desean sets up his zero based budget and has $175 left after he assigns all of his expenses to each category. What would be a good category for him to put that money in?

Think about the process of zero-based budgeting. What might one drawback of this method be?

What is one benefit of envelope budgeting?

True or False: Envelope budgeting means that you have to deal with only cash and physical envelopes.

Do you think this is a method that you would use? How might using this method benefit you?

Create a personal budget. This budget can be for college, post-graduation, a hypothetical business, anything. This budget should be done in google sheets and there are several different templates you can use to assist in this.

What does it mean to "pay yourself first?"

Which of the following is a recurring expense?

Djamila is using the envelope budgeting method. She wants to go out with friends to eat and opens her Restaurant envelope to find that it only has $5 left in it. What budgeting advice would you give to her?

Learning Objectives

Learning Objectives

Pretend you won $1,000 in a contest. Explain how much of this money you would allocate toward spending, saving, and other purposes and what led you to those decisions.

In your own words, explain the difference between a fixed expense and a variable expense.

Briefly summarize the Pay Yourself First strategy.

The 50/30/20 budget recommends you spend 50% of your budget on needs. What factors would impact your ability to stick to this rule?

Zero-based budgeting involves making sure every available dollar is accounted for. How is this beneficial for someone using this method?

How does envelope budgeting work?

Desean sets up his zero based budget and has $175 left after he assigns all of his expenses to each category. What would be a good category for him to put that money in?

Think about the process of zero-based budgeting. What might one drawback of this method be?

What is one benefit of envelope budgeting?

True or False: Envelope budgeting means that you have to deal with only cash and physical envelopes.

Do you think this is a method that you would use? How might using this method benefit you?

Create a personal budget. This budget can be for college, post-graduation, a hypothetical business, anything. This budget should be done in google sheets and there are several different templates you can use to assist in this.

What does it mean to "pay yourself first?"

Which of the following is a recurring expense?

Djamila is using the envelope budgeting method. She wants to go out with friends to eat and opens her Restaurant envelope to find that it only has $5 left in it. What budgeting advice would you give to her?